The assessment of transfer pricing and rules on allocation of income to permanent establishments (PEs) applicable to multinational enterprises (MNEs) under European State aid law is one of the most relevant and challenging topics in tax environment. This book presents an in-depth analysis of questions raised by the European Commission (EC) in relation to specific intra-group transactions and dealings that are within the scope of high-profile cases along with recommendations for a new and improved legal analytical framework to assess transfer pricing and income allocation measures under European State aid law. The core elements of this fundamental analysis include the following:1.Analysing a difficult relationship between European State aid law and fiscal principles based on the work of the Organisation for Economic Co-operation and Development (OECD) and as implemented or adhered to by the Member States of the European Union (EU Member States).2.Examining possibilities for achieving a reconciliation between the fiscal national and international frameworks based on the OECD’s work and the EC’s legal analytical approach under European State aid rules.3.Offering suggestions for the values and legal approaches that the EC’s legal analytical framework should fulfil in order to respect national fiscal sovereignty and fiscal sensitivity of the measures being assessed, and that would ensure that competition in the European Union (EU) is not violated. The detailed analysis will be of relevance for the EC and European Courts. They could become inspired by these recommendations and consider the impact of State aid law on direct taxation, i.e. principles, rules, administrative practices, and guidelines on the taxation of MNEs. This analysis will also be welcomed by EU Member States and their national relevant (tax) authorities that need to reconcile both legal frameworks within their national laws and administrative practices, as well as for national judges and lawyers who apply European State aid and the OECD transfer pricing and income allocation frameworks to national fiscal provisions. This book is also directed at society as a whole, as it contributes to the transparency of the State aid framework used to analyse transfer pricing and income allocation rules.